CQ TODAY ONLINE NEWS March 28, 2012 – 11:14 p.m.

Ryan Budget Pushes Reconciliation Plan

By Paul M. Krawzak and Kerry Young, CQ Staff

House Republican leaders want to put Senate Democrats on the spot with the budget resolution they plan to adopt Thursday.

The spending plan (H Con Res 112) by Rep. Paul D. Ryan, R-Wis., includes instructions that direct six authorizing committees to find a total of $261 billion in cuts to mandatory programs. Along with some discretionary savings, the reductions would replace $98 billion in automatic cuts set to hit discretionary accounts in January.

That would put the House on a path to what amounts to a shadow reconciliation process, with discretionary spending set $19 billion below the figure agreed to in last year’s battle over the debt limit and a detailed description of reductions that would replace the automatic cuts, or sequester, that all sides say they want to avoid.

Reconciliation can formally proceed only if both chambers adopt a budget resolution, but in this case House Republicans are moving ahead with a plan that would draw lines around specific programs while signaling a hard line in a likely negotiation with Senate Democrats later this year over tax and spending issues.

Senate Majority Leader Harry Reid, D-Nev., has said he does not intend to introduce a budget resolution because the debt limit law (PL 112-25) established a discretionary spending limit of $1.047 trillion for the fiscal year that begins Oct. 1.

“I think we are advantaged if we provide leadership,” said Rep. Pat Tiberi, R-Ohio, who sits on the House Ways and Means Committee. “And I think in the end that will help us with independent voters.”

In a memo circulated among House Republicans, GOP leaders said once the House passes a reconciliation bill, “it will be sent to the Senate for its consideration.” The memo said that if the Senate does not pass the House bill, or negotiate with the House on a compromise, the scheduled “discretionary sequester of $98 billion will take place on January 2, 2013.”

The memo noted that unless the Senate also adopts a budget resolution containing reconciliation instructions, any related bill considered by that chamber would not have the expedited procedures provided by the procedure, including protection from a filibuster. But the memo also said “nothing prevents the Senate from acting on the House’s reconciliation bill in lieu of it passing a budget, just as it could consider any House bill.”

Deadline in April

The budget resolution directs the Agriculture, Energy and Commerce, Financial Services, Judiciary, Oversight and Government Reform, and Ways and Means committees to submit recommendations for the mandatory cuts to the Budget Committee by April 27. Each committee is given a savings total it is expected to meet or exceed through spending cuts. Energy and Commerce, for example, is tasked with coming up with $96.76 billion in cuts.

After the Budget Committee, chaired by Ryan, compiles the recommendations into what it will call a reconciliation bill, the House is expected to consider the legislation as early as May.

Republicans also say that detailing the mandatory cuts and putting them into a bill will provide the House with leverage when the two chambers begin to negotiate over spending bills, taxes and replacing the automatic cuts later in the year. “I’m excited about the reconciliation process and making committees go back and actually make cuts,” said freshman Marlin Stutzman, R-Ind. “I think we have better footing because we’ve actually gone through the process.”

Some of the cuts may be surprisingly close at hand.

Ryan Budget Pushes Reconciliation Plan

When House authorizing committees begin assembling reductions in mandatory programs for budget reconciliation, they will look at the dozens of spending cuts that were debated by Republicans and Democrats during months of behind-the-scenes deficit reduction negotiations last year. Vice President Joseph R. Biden Jr. led talks with lawmakers; President Obama and Speaker John A. Boehner, R-Ohio, unsuccessfully sought a deal; and the Joint Select Committee on Deficit Reduction worked for several weeks seeking an agreement.

The joint committee produced a series of legislative proposals that already have been reviewed and scored by the Congressional Budget Office.

Tiberi said the authorizing committees “will look at those lists before there’s new things put on the table.”

The committees are unlikely to produce any radical new budget-cutting ideas, said one GOP aide, “especially since the Senate isn’t going to do anything with it.”

Some of the proposals already have shown up in various pieces of legislation. One was an offset in a two-month payroll tax break extension (PL 112-78) enacted in December that required Fannie Mae and Freddie Mac to increase their fees for guaranteeing mortgage loans for a 10-year period, through Oct. 1, 2021.

The initial year-long payroll tax extension bill passed by the House in December contains cuts that are sure to be considered for the reconciliation bill. Ways and Means Chairman Dave Camp, R-Mich., who also served on the joint committee, wrote that bill. Many of the measure’s offsets were dropped before House and Senate leaders struck a final deal, including a provision to cut spending for a prevention and public health fund established by the 2010 health care overhaul (PL 111-148, PL 111-152).

Some cuts are likely to be drawn from a detailed report accompanying the House budget resolution.

Putting Pressure on Democrats

Filling the reconciliation legislation with spending cuts favored by Republicans also would put greater pressure on Democrats to bring out their own proposals for reductions. Republicans also may want to include proposals already endorsed by Obama to emphasize Republican efforts to find common ground. That also would allow GOP leaders to highlight the Senate’s refusal to act on its own mandatory spending reduction legislation this year.

Democrats are using the budget debate to highlight the differences in how they would stop the automatic cuts, with an eye toward hammering at these points in campaigns this year.

The threat of sequester “crystallizes how important it is to have a good framework for coming up with an overall budget,” said Xavier Becerra of California, vice chairman of the House Democratic Caucus, who served on last year’s joint deficit reduction committee.

“I wish members had the opportunity to have those profound conversations that we were able to have on the supercommittee,” Becerra said. “And it is tough to do that. So it’s good that you can have any number of ideas out there for the budget and healthy extended debate.”